Stateways March April 2018

StateWays is the only magazine exclusively covering the control state system within the beverage alcohol industry, with annual updates from liquor control commissions and alcohol control boards and yearly fiscal reporting from control jurisdictions

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StateWays | | March/April 2018 10 and publications that are intended to educate and inform mem- bers about the important topics and issues pertaining to running a successful municipal liquor business. The association works closely with members to evaluate all aspects of their operations and offer insights and advice as to how to improve their processes. Each May, the MMBA also hosts an annual three-day con- ference, which includes educational seminars and business meet- ings. The association's regional meetings include half-day annual events in six locations across the state of Minnesota that cover a wide variety of operational and legislative issues. The organiza- tion's two-day "boot camp" also is a popular annual event, cov- ering the basics of municipal liquor operations including pricing, inventory control, merchandising and promotions. Christopher Arnold, liquor operations manager at Bagley Municipal Liquor (and an MMBA Director) says members are determined to help each other succeed and are eager to share information. They take a personal interest in the success of their businesses and the municipal beverage industry at large. As Arnold explains, one thing MMBA offers is consulting for free to any municipality. This entails MMBA directors helping store operators look at their business and correct any issues. "A big part of being on the board is us being able to go out and help other liquor stores," Arnold says. "We offer any help that they need to grow their business. This is a big emphasis of ours. For example, right now I'm consulting with a store that is having some computer issues and software problems. They asked if we can come in and help, so we spent a few days down there and got them turned around. As a municipal, one of our driving forces is the goal of generating revenue for our commu- nity, so it follows that we help everyone out." EMBRACING CHALLENGES As Paul Kaspszak, executive director of MMBA explains, off- sale municipal liquor operations have geographic exclusivity but not competitive exclusivity. In other words, government stores compete against private businesses right down the road. This competition has caused municipal liquor operations to become more business-savvy, with the goal of encouraging customers to purchase at the municipal liquor operation, instead of some- where else. "In today's market, municipal liquor is about maintaining a balance of control and making money for the community, so we say that we have two purposes—control the sale of alco- hol, while simultaneously generating income for community," Kaspszak says. "The balance for each individual city is some- what higher. There are some cities that need the money to re- duce property taxes and pay for special projects." And while municipal owned-and-operated entities help con- trol the sale of alcohol, there are key challenges involved in this. As Kaspszak explains, "controlling the sale of alcohol is differ- ent than 'responsible service.' All alcohol sellers should serve responsibly by not selling to underage people or intoxicated individuals. It's about staying true to the community's morals." For example, while it is legal for a municipal liquor operation to do a "2 for 1" just like a private operator can, MMBA discour- ages that practice because it promotes onsite consumption. "We say if you are going to do that, do it as a price pro- motion," Kaspszak says. "That's control. Through that control aspect, we encourage members to do the pricing discount." In mid-2017, Minnesota Governor Mark Dayton signed into law Sunday liquor sales, ending its more than a 100-year-old ban of selling liquor on Sundays. Under the new law, liquor stores can now operate from 11 a.m. until 6 p.m. on Sunday, but cannot accept liquor deliveries. Municipalities are also able to restrict Sunday sales in their communities. "Sunday sales was a big issue, a long campaign," Arnold says. "My personal opinion was everything was fi ne the way it was. When it was passed I had to look at our store's operation as a whole, as well as our surrounding competitors. We had to be open because we are on a four-lane highway and we have up to 10,000 vehicles a day passing our building. Our competitors were going to be open, so we had to be open. We opened a new facility four years ago, so we had to protect our payments and go the extra mile for our customers and our citizens." Kaspszak's job is to help MMBA members succeed in what- ever shape that takes. "For a lot of trade associations, politics is the main focus. If agency agency profile MINNESOTA PROFILE The MMBA represents 210 cities in Minnesota with municipal liquor operations.

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